By age 70, you may have paid off your mortgage and don't expect to borrow money. So your credit score is not important, right? That's what nearly half the boomers recently polled by credit-reporting company TransUnion said. But they're wrong. "Your credit score is a vital financial tool at every age," says Ken Chaplin, a TransUnion senior vice president.
A credit score tries to predict the likelihood you'll pay your debts. Lenders use it when deciding to offer a mortgage, auto loan or credit card. Insurers also look at it to set auto and homeowners policy premiums. Prospective landlords and utility companies will scrutinize your score if you move to an apartment. Plus, your score will be a factor if you cosign a student loan.
The problem for many older people is that their score declines because they no longer use credit (debit cards don't affect scores). As their house, car, credit card payments and other credit activity wind down, their credit report eventually becomes so thin that it can't maintain a score or produces only a low one, says John Ulzheimer, author of The Smart Consumer's Guide to Good Credit.
The solution isn't to rack up credit card debt quickly or take out a loan. At far right, find some debt-free ways to up your score.
Here are four easy ways to improve your score:
Increase limits: Periodically ask your card issuers to raise your credit limits by $500 or $1,000, says credit expert John Ulzheimer. Cards with little or no balances and higher credit limits boost a score.
See also: Bad credit costs money
Maintain accounts: Keep old credit card accounts open, even if you don't use them much. Canceling a card will reduce the amount of credit available to you and can ding your score.
Rebuild a History: You might have to start with a secured card from your bank. You deposit a sum in an account that serves as your line of credit and allows you to build a credit history over time.
Check your report: Correct any errors dragging down your score. "Make sure all the activity is yours," says TransUnion's Chaplin. "If not, someone else could have accessed your credit—and damaged your score." Get a free copy of your report yearly from each of the three major credit-reporting companies—go to annualcreditreport.com.
Eileen Ambrose covers money and personal finance for AARP.